AMD loses just $20 million in first quarter 2014

A big improvement on the $145 million loss a year ago.

In the first quarter of 2014, struggling chip company AMD reported a loss of $20 million on revenue of $1.40 billion. Compared to the same quarter a year ago, this is a 28-percent increase in revenue and an 87-percent reduction in losses.

Further Reading

The increased revenue was driven by the Graphics and Visual Solutions division, which saw a 118-percent increase in year-on-year revenue, from $337 million to $734 million. Operating income for the group was up over five times, from $16 million to $91 million. Graphics and Visual Solutions includes both AMD's GPU sales and also its semi-custom systems-on-chips. With Microsoft's Xbox One and Sony's PlayStation 4 both using semi-custom SoCs from AMD, this division should continue to see healthy revenues for some years to come.

The Computing Solutions group, which is where AMD accounts for its standalone CPUs—both with and without integrated GPUs—saw a 12-percent decline in revenue, from $751 million to $663 million. This is due to lower shipments of its processors. However, the division also saw a substantial 93-percent reduction in its losses, from $39 million to $3 million, attributed to lower operating expenses.

The quarter also saw AMD make its final $213 million payment to chip foundry GlobalFoundries stemming from the contract renegotiation in 2012. AMD had to pay up to break an exclusivity agreement and enable it to use TSMC to build some chips. Perhaps surprisingly, since then AMD has moved much of its manufacturing back to GF.

After some painful years, AMD's prospects seem a little more stable than they once did. The console design wins are providing substantial revenue, and the strong performance of the R7 and R9 GPUs will also help the company's graphics segment. But the processor problems are continuing: AMD's products in both the desktop and server markets are relatively uncompelling when compared to Intel's, and there's nothing on the horizon that will fundamentally change this.

It is worth noting that AMD's graphics revenue and income is down from Q4/2014. That's not strange per se, but it reinforces that it's year-on-year and not quarter-on-quarter (in response to cryptocurrency note).

It is also worth noting that, according to AMD, "Graphics and Visual Solutions segment includes [...] semi-custom System-on-Chip (SOC) products, development services and technology for game consoles."¨

In other words, probably the majority of the revenue (and expense) for the XB1 and PS4 are in the Graphics division as opposed to the CPU one. Expect these numbers to be slightly tilted if AMD wants to prop up the CPU business.

Final item of note, AMD's operating profit was $49M, which was completely wiped out by interest expenses ($47M) and "other expenses" of $21M. AMD's debt is up over $300M since the year-ago quarter.

The signs are going in a good direction, but they will need to show profit and reduce debt to stabilise the company.

It is worth noting that AMD's graphics revenue and income is down from Q4/2014. That's not strange per se, but it reinforces that it's year-on-year and not quarter-on-quarter (in response to cryptocurrency note).

My expectation is that the console aspect is going to make the Graphics division revenue a lot more seasonal than it might once have been.

The increased revenue was driven by the Graphics and Visual Solutions division, which saw a 118 percent increase in year-on-year revenue, from $337 million to $734 million.

I wonder how long that rate of growth will last once the cryptocurrency bubble bursts.

That bubble is not large enough. The 'GPU' segment includes Consoles, which, certainly account for far more sales than Cryptocurrency does.

If anything, the release of consoles was a HUGE added factor, as, there were millions stockpiled... given 5 million total XBO/PS4 stockpiled for launch, that would translate to revenue, of, well, a lot.

Your response to a comment saying its not all being driven by cryptocurrencies was to point out a line that simply stated most of the revenues were from the graphics division. It kind of comes across like you are trying to say that.

I'm not saying it's impossible a large portion of that is from miners, but without numbers it's all speculation.

Your response to a comment saying its not all being driven by cryptocurrencies was to point out a line that simply stated most of the revenues were from the graphics division. It kind of comes across like you are trying to say that.

A response that quoted how the graphics division includes revenues from "semi-custom systems-on-chips", and which the article explicitly states includes revenues from consoles. I didn't think it was necessary to restate the obvious, but I apologise for my mistake.

Maybe some of the money came from cryptocurrency mining, but lets be honest, for the past 6 months or so, using GPUs no longer makes sense compared with the speed and power efficiency of ASICs. As while they were not really available in the early to teen "years" of cryptocurrencies, they are now from what I hear.

Personally, my biggest worry about AMD, aside from their fairly huge debtload, is their lack of laptop chips or APUs. Sure, their roadmap has a couple of them, including some that are meant to be out in coming months, but from what I've read, they still burn through ~25W, which is a lot for a chip that's slower than an Haswell U (like the i7-4500U, which is rated at 15W), even if the GPU is 30-40% faster.

The increased revenue was driven by the Graphics and Visual Solutions division, which saw a 118 percent increase in year-on-year revenue, from $337 million to $734 million.

I wonder how long that rate of growth will last once the cryptocurrency bubble bursts.

I'm pretty sure there aren't anything like $700 million worth of video cards out there mining cryptocurrencies.

Interestingly, I bought an AMD GPU in the last year, but it wasn't to mine Cryptocurrencies (although since I had it, I did experiment).

I'd been using the Nvidia GPUs for a few years and was currently rocking a 560Ti 448. I did some comparisons on the AMD cards after hearing how much better they are at cryptocurrencies. In the price range I was considering (the 560/660 Nvidia cards and the 7850/7950 AMD cards), performance was similar for the games I was playing, the AMD cards were typically cheaper on sale, and they used a lot less power both idle and under load.

I ended up snagging a 7850 for a slick price after rebate and I've been very pleased with the performance. It hasn't been a huge upgrade since the 560Ti it was replace is a pretty solid card still, but it's a quality GPU.

I believe this a good sign of things to come. I'm not totally convinced Read has played a huge impact yet, but I hope AMD continues to improve.

We need AMD to improve in multiple areas to make sure companies like Intel and Nvidia are kept in check. By "kept in check", I mean keeping prices down throughout the entire product line. Intel's prices are a little too inflated right now, especially for their best chips. The i7 2500K was a $200 CAD chip, but this generation's equivalent 4670K is around $250 CAD. If AMD had a chip that was either at least as powerful or energy efficient, the 4670K would be pushed back down another $25. Of course, I'm crying first world problems, but a strong AMD has benefits for everyone.

The scrypt one is right now only beginning to burst. I think the ~350kh/s or so USB Gridseed miners (which was not all that better than GPUs other than in power consumption) came in mid-Feb or so, and the quarter ended March 31.

It is worth noting that AMD's graphics revenue and income is down from Q4/2014. That's not strange per se, but it reinforces that it's year-on-year and not quarter-on-quarter (in response to cryptocurrency note).

My expectation is that the console aspect is going to make the Graphics division revenue a lot more seasonal than it might once have been.

I'm willing to buy the premise, but I disagree on the immediate impacts. I doubt AMD, as a subcontractor, is paid per shipped/sold PS4/XB1; consequently, and taking manufacturing, shipping and retail time into account, I doubt we will see as clear a spike in Q4 for AMD as for Sony from seasonal console sales. More likely, I'd say, we might see slight shift in seasonality towards Q3, i.e. anticipating the sales season.

Having said that, it will be interesting to see the margin evolution as time progresses and both Sony and MS undoubtedly start putting price pressure on their consoles. Between Q4 and Q1, they include the sales of over 10 million console chips, possibly more. Barring any landslide shift that creates two new PS2s, that means probably more than 10% of the revenue potential from the console generation has been tapped for AMD's side.

Global foundries has licenced technology from Ssmsung which should help AMD when it comes to shrinking the CPU die and improving energy efficiency. The new line of AMD ARMv8 CPU will be interesting to see whether Microsoft jumps onboard with Windows Server for ARMv8.

It's good to see them making some progress; while their CPUs are a bit underwhelming, I'm a big fan of AMD's APUs for lightweight systems, and the new Kaveri offerings are very nice, and could potentially get even better thanks to HSA and Mantle (though Mantle's main benefits probably won't affect APUs with HSA as much I think, though I could be wrong).

While Haswell definitely caught Intel up by quite a ways, AMD definitely still leads on the integrated GPU side, and the A-series is very good value, assuming you're fine without a discrete graphics card. I'm hoping more Steam Machines will offer them for lightweight gaming, maybe with expansion room to add a discrete GPU later; not everyone needs to run all the latest games on day one after all, and it's the kind of thing I'm thinking of doing myself for some modest, small form factor gaming.

The introduction of the AM1 platform definitely gives them even more in the value space. I'm just not sure what to think about AMD's server plans, unless maybe they intend to release a high density processor with a lot of GPU power; e.g - a modest CPU for managing the system with a ton of OpenCL/HSA compute power to do the actual heavy lifting. This seems more their strength, though I'm not sure how big a market there is for it.

On the discrete GPU side, I think AMD really needs to get their heat under-control; their high-end GPUs are pretty good, but damn can they get noisy! I'd really like to see more of them with integrated liquid cooling, or maybe even see AMD release a standard profile for GPU liquid cooling for all of their future cards, so even if initial models come with typical coolers, other manufacturers can easily make water blocks for them, or bundle liquid cooling as standard. For high-end gaming at smaller sizes I think liquid cooling is a must, but even in big beastly systems it can cut down on noise or improve performance so much that it's bewildering that we still only really get closed loop coolers for CPUs.

Maybe some of the money came from cryptocurrency mining, but lets be honest, for the past 6 months or so, using GPUs no longer makes sense compared with the speed and power efficiency of ASICs. As while they were not really available in the early to teen "years" of cryptocurrencies, they are now from what I hear.

Personally, my biggest worry about AMD, aside from their fairly huge debtload, is their lack of laptop chips or APUs. Sure, their roadmap has a couple of them, including some that are meant to be out in coming months, but from what I've read, they still burn through ~25W, which is a lot for a chip that's slower than an Haswell U (like the i7-4500U, which is rated at 15W), even if the GPU is 30-40% faster.

Same goes for their standard voltage chips. Where is the 35 watt kaveri a10 for laptops? or heck, why not a 45 watt version? llano had a 45 watt a8, whcih was awesome, and AMDs a10's are terribly TDP limited in mobile. intl's high end mobile has a 47 watt TDP, why not AMD?Between their unavaliability and the broken nature of AMD's linux drivers when it comes to games (minecraft still does not work on anything but ubuntu on my thinkpad edge 535) im being driven to intel's broadwell for my next laptop. which sucks, Id rather have the amd a10.

Maybe some of the money came from cryptocurrency mining, but lets be honest, for the past 6 months or so, using GPUs no longer makes sense compared with the speed and power efficiency of ASICs. As while they were not really available in the early to teen "years" of cryptocurrencies, they are now from what I hear.

Personally, my biggest worry about AMD, aside from their fairly huge debtload, is their lack of laptop chips or APUs. Sure, their roadmap has a couple of them, including some that are meant to be out in coming months, but from what I've read, they still burn through ~25W, which is a lot for a chip that's slower than an Haswell U (like the i7-4500U, which is rated at 15W), even if the GPU is 30-40% faster.

As far as competing with an i7, that is a problem across the board (AMD doesn't make anything to compete with the i7). AMD's APUs tend to live in much lower cost laptops, where a customer is unlikely to pay for a discrete graphics chip/card. I know the last APU had some issues: is was better than 30%-40% faster, but only when pulling plenty of power. Too many systems wouldn't send that much power (the heatsink wasn't up to removing it), even when plugged into AC. I think the current APU is likely best for anything below $800 (US).

I'm glad to see they're trucking along, and that they at least have a strong foothold in the graphics market...but, I can't help but feel like a fool for hoping they'll come up with something competitive in the CPU arena. Their performance edge in the Athlon days was great, but they could manage to get marketshare. Ah well, we'll see what happens (typing this from an A6-4400M btw).

Kabini is a good platform and if they scaled it up, I'd guess it would be more competitive than AMD's existing desktop/server lines. (Remember, non-SoC CPU power draw numbers are not comparable with SoC numbers.)

Bay Trail is even better but if Intel scaled it up, it would totally cannibalize their existing profitable desktop lines. Luckily, Intel's saving grace is the Atom name-brand is total crap where people will spend more money on an I3 not realizing a Bay Trail Atom has closed the gap greatly.

Since I'm not a direct investor in either (hold a tiny bit of both via index funds) -- I'd say let the hounds loose! More/faster Kabini + Bay Trail = good for me as a consumer.

According to the doomsayers here, AMD shouldn't even be around anymore....they have been parroting the doom and gloom for years now, and yet AMD keeps chugging along.

In any case, this is great news for them.

Yeah, every time I see an Ars story on AMD I remember the one they ran talking about the "death knell" for AMD.

While not dead yet, the company is bobbing along. It's like a guy in a small life raft out at sea. He can see land in site, and he's trying various things to paddle over to it. They're slowly making some headway.

The stock has been waffling between $3.50 & $4.25 for the longest time. Investors, being very fickle these days, buy in, buy out, etc, etc, to pay the roller coaster. Overall it's been sitting around $3.80 or so on average. Investors see the innovations, see the changes, but are still tepid about jumping in.

Cant' turn a company on a dime over night, but at least AMD is headed in the right direction. Compare that to, say, Blackberry, who's still waffling around and in denial about their situation.

How-so? AMD's integrated graphics are really very good, and we're seeing more and it seems clear that leveraging GPU compute power is a good way to boost performance of applications. In fact, Apple's clearly betting on GPU computation with their new Mac Pro.

To that end, AMD's acquisition of ATI was clearly a very smart move, as it's given them extremely capable integrated GPUs both for modest gaming, and also for computation. HSA is also a very important step as well, allowing both components of an APU to finally co-operate fully like we've always wanted them to, though I'm unsure how much it's going to take off, but if both XBox One and PS4 can support it then that could cause big strides for gaming support of HSA.

Sure, the pure CPU side of things is a bit underwhelming, but personally I think AMD are right to put the focus on general purpose computation, and if we get more applications taking advantage then a Kaveri APU could be pretty damn competitive, though I do expect it may see early adopter syndrome (i.e - the generation after will be more likely to reap more of the benefits).

In the value space AMD are very competitive; the A8-6600k (and the 6500) are pretty sweet at their price point. I'm currently thinking of building my own small(-ish) form factor gaming machine around an over clocked Kaveri, with a view to adding discrete graphics later. I have relatively modest graphical requirements of a system, but I think it should do very nicely for a while.

To that end, AMD's acquisition of ATI was clearly a very smart move, as it's given them extremely capable integrated GPUs both for modest gaming, and also for computation.

I believe strongly that value needs to be considered when evaluating any major capital investment. I think the ATI acquisition would have been a smart move for about $1.5 billion or less. $5.4 billion was IMO simply far too high a price to pay. It resulted in two major blows that AMD are still reeling from:- AMD having to sell their fabs to stay afloat, which directly resulted in their having fallen far behind Intel today in CPU performance / watt.- AMD carrying a huge debt load (>$2 billion), interest payments on which are wiping out their profits.

I bet if Rory Read could turn back the clock and put himself in Ruiz's shoes as CEO in 2006, he would not have gone along with paying $5.4 billion for ATI. Of course, we need to remember that the CEO works for the board of directors and the board of directors themselves report to the public, so we can't be sure who pulled the strings on this decision but I don't believe the *value* for the dollars spent has yet been proven considering AMD's current revenues & profit.

An analogy is the 2008 U.S. financial crisis. Since 2008 a total of around $3 trillion (and counting) between Congress and the Fed in "stimulus" funding has been added to the public debt load for the future unborn to pay off. Were the results worth it? Would it perhaps have been better to the future unborn for us to have suffered the pain of a run on the banks and a ten year depression than to be burdened with such a tremendous amount of debt? Was there another way to achieve essentially the same results without costing $3+ trillion?

I believe strongly that value needs to be considered when evaluating any major capital investment. I think the ATI acquisition would have been a smart move for about $1.5 billion or less. $5.4 billion was IMO simply far too high a price to pay. It resulted in two major blows that AMD are still reeling from:- AMD having to sell their fabs to stay afloat, which directly resulted in their having fallen far behind Intel today in CPU performance / watt.- AMD carrying a huge debt load (>$2 billion), interest payments on which are wiping out their profits.

Oh absolutely, and it's interesting you mentioned the 2008 crisis, as it does kind of highlight the acquisition of ATI as a gamble that very nearly lost due to totally unforeseen circumstances. Granted, at the price involved it was maybe a gamble that AMD shouldn't have taken anyway, but even if they'd remained highly competitive with Intel CPUs at a technical level, I think that taking risks in new innovations (and integrated GPUs in particular) was still the right move for AMD for them to remain relevant, otherwise they would have continued to struggle to really break out from under Intel's shadow in any way. Going into GPUs gives them a bit of diversity, and integrated GPUs are a good area for the future.

I mean, I doubt anyone at AMD expected a major global recession, and I doubt things would have been so shaky for AMD if that hadn't happened. Still a big risk, but in the context of growing irrelevance I think it was still the right call; I mean, sure, if they'd known there was going to be a terrible recession, then they definitely wouldn't have paid so much, but there's the benefit of hindsight.

You're right that it's a tough decision to show the value on, but I think ultimately it was a gamble at growth weighed against being forced to shrink. I still think it was the right move though, hindsight aside.